With Facebook buying Instagram for $1 billion, is the mobile app bubble here?

The news that Facebook has bought Instagram makes perfect sense. Mobile is the future, and Facebook’s own app efforts have been the subject of much criticism. And more problematic, it remains a vulnerability going forward because of the lack of mobile revenue.

Instagram won’t provide any revenue, not any time soon. Maybe not ever. But it does provide a great mobile experience the meshes well with Facebook. You don’t share Instagram photos on an Instagram Web site, after all, you share them on the app, on Facebook and on Twitter.

Clearly, the $1 billion was either a pre-emptive move, an offer Instagram couldn’t refuse, or there were multiple bidders in the game, driving up the price. I’ll be curious to see how much Facebook is required to disclose about the history of the transaction when it updates its S-1.

But I also wonder if this will now trigger a larger bidding war for the most popular mobile apps out there?

It would be tough for Apple to get into this game, despite its mind-boggling piles of cash. It would likely raise thorny anti-trust issues.

But it’s easy to imagine Google swooping in to grab some other photo sharing apps, like Hipstamatic, to give it some way to match Facebook on the photo-filtering features.

And extending beyond that, do each of these players need a social news app, like Flipboard? Twitter did buy social news app Summify earlier this year for an undisclosed sum.

Or what about a social music app, like Pandora or Spotify? The music ones become trickier, because of rights and royalties issues. But still, lots of interesting data tucked in there.

Finally, while it’s both mobile and Web, you have to wonder just what someone would pay for Pinterest at this point?

In any case, it’s easy to see how we get to an arms race in the world of mobile apps. Companies become paranoid that they’ll miss out, they pay too much to make sure a hot app doesn’t land in the lap of a competitor. This is going to make some young entrepreneurs very wealthy, some quick returns for lucky VCs. Whether it turns out to make an ounce of business sense, well, it’s the kind of question that tends not to get asked until much, much later.

What is the little rectangular thingy on the finger at the top of the page?

http://www.siliconbeat.com Chris O’Brien

I believe it’s a chip of some kind.

http://www.specsx.com Specs

Instagram has more than 1 million users and this apps is very useful in facebook yet facebook were not the first to recognize this idea were not able to realize how important this idea to their existing application. So buying it is no brainer for them and one billion dollars is just only a coin compared to what the effect the instagram will bring to the facebook users.